In a speech delivered yesterday, Rod Sims, the Chairman of the Australian Competition and Consumer Commission (ACCC) announced the ACCC’s Compliance and Enforcement Policy and Priorities for 2019. The speech provides valuable insights into the ACCC's enforcement priorities, including the types of conduct and industries on which the ACCC will focus their resources in the year ahead.

Top five key priorities for the ACCC

1. Competition enforcement

As always, the ACCC will continue to prioritise investigations and enforcement action in relation to cartel and other anti-competitive conduct. In his speech, Mr Sims emphasised that the ACCC's cartel investigations team is expecting decisions on three criminal cartel investigations, with further investigations into contraventions of the cartel conduct provisions at an advanced stage. A particular area of focus in 2019 will be conduct that contravenes the new misuse of market power and concerted practices provisions. While these laws are yet to be tested in the courts, Mr Sims indicated that such proceedings are likely to be initiated this year.

The following industries will be under the spotlight:

• Financial services: Mr Sims noted that an underlying theme of the Final Report of the Financial Services Royal Commission was the lack of vigorous competition among the major banks or in some parts of the financial services sector. To that end, the ACCC has established a Financial Services Competition Branch, which includes a permanent competition investigation team; and
• Commercial construction: anti-competitive and unfair practices in the commercial construction sector will be the subject of the ACCC's focus in respect of both competition and consumer law issues. Last year, the ACCC set up a Commercial Construction Unit to focus on investigations and enforcement actions in the sector.

2. Consumer law enforcement

Mr Sims is advocating for penalties of over $100 million for breaches of the Australian Consumer Law to improve deterrence. This follows legislative reform that commenced in September 2018. This increased the penalties for many breaches of the Australian Consumer Law from $1.1 million per contravention to the greater of $10 million, or three times the benefit from the conduct or, where the benefit cannot be calculated, 10% of annual Australian sales turnover.

The ACCC will be focusing on the following consumer enforcement priorities in 2019:

• Competition and consumer issues arising from customer loyalty schemes;
• Consumer guarantee rights in the context of the large retailers and manufacturers that supply high value consumer goods, including whitegoods and electrical goods;
• Advertising practices on social media platforms, and 'subscription traps'; and
• The complexity and opacity of pricing of essential services, particularly in the energy and telecommunications sectors.

In addition to these new priorities, the ACCC has indicated that it will continue to focus on a number of existing consumer enforcement issues where it considers concerns still exist, namely – misconduct in the franchising sector and lack of compliance with the Franchising Code of Conduct, business-to-business unfair contract terms (particularly in the agricultural sector), investigations of potential enforcement issues following the Preliminary Report on Digital Platforms and investigations in the new car retailing sector.

3. Product safety

The ACCC will be releasing a separate Product Safety Priorities in March 2019, which Mr Sims says will focus on ensuring the effectiveness of the compulsory recall notice of vehicles with Takata airbags as well as improving the safety of quad bikes.

4. Current market studies

The ACCC will focus on the impact on consumers arising from the collection and use of consumer data by digital platforms. It will also advance the work on the Consumer Data Right (CDR), which is starting with banks and will move through other sectors such as energy and telecommunications. The ACCC is currently preparing the rules for the CDR system and anticipates that generic data will be shared in July 2019, while consumer data is expected to be shared no later than February 2020.

The ACCC will also be focusing on a number of market studies, including:

• Continuing the Northern Australia Insurance Inquiry, which will address whether some form of assistance may be appropriate to reduce rapidly rising insurance premiums in Northern Australia;
• Foreign exchange fees as well as competition in banking more generally in the financial services industry; an
• Other industries and issues under the spotlight including agriculture, electricity affordability and rising gas prices.

5. Advocacy

The ACCC considers advocacy as a vital part of its activity. It has a number of new and continuing advocacy priorities for 2019, including:

• Reforms to the unfair contract terms (UCT) regime to include a prohibition against UCTs and penalties to their inclusion in standard form contracts;
• Introducing a prohibition in respect of the sale of unsafe goods that requires companies to take reasonable steps to protect consumers by not supplying unsafe products in Australia; and
• Assessment of the adequacy of the laws against companies engaging in 'harsh and unfair conduct' towards consumers with a view to capturing conduct that falls outside the law on misleading conduct, unconscionable conduct, and in part, unfair contract terms.

The ACCC's policy advocacy will include a focus on protecting the competitive process in mergers and will seek to counter what it describes as 'potentially naïve views about commercial behaviour and how companies respond to the situations they find themselves in', particularly in the merger clearance context. This appears to be the beginning of a move by the ACCC to advocate for 'lowering the bar' on blocking mergers, based on a common refrain that the rigour required to prove things in Court is too hard.

How can we assist your business in response to the ACCC's priorities?

1. Design and deliver up to date competition and consumer law compliance training;
2. Assess the likely impact of proposed reforms to competition and consumer laws on your business and develop appropriate strategies in response;
3. Review existing and anticipated arrangements to identify any risk stemming from the competition and consumer provisions under the spotlight;
4. Prepare your business for compliance with the CDR system;
5. Assist with responses to regulatory investigations and information requests.